Unsold supply of homes varies widely by property type

October 27, 2017

This week we will be looking at the monthly supply of unsold single-family homes listed for sale in Cape Coral in September, along with 3rd quarter and year-to-date comparisons. As you will see in the numbers below, there are some significant differences in the monthly supply between the various property segments in the Cape. Our approach of analyzing the data by the specific property types unique to Cape Coral real estate helps provide a more accurate reflection of the current market conditions, versus blending the data together into one general overview report about our market, which can lead to larger pricing errors.

You will also see some Hurricane Irma-related volatility in the monthly supply of unsold homes, which caused some shifts in the supply numbers due to abnormal market conditions. We would expect these supply shifts to fall back into more normal patterns as the number of closed home sales eventually rebounds back towards our 2017 averages. As of Oct. 24, when we took a quick look at the October sales numbers, there were 221 home sales reported in the Cape. This compares to the monthly average of 414 per month prior to Irma, so the number of closed home sales looks like it is still trending below average, which, if it holds true, would give us our second month of lower post-Irma sales, as we expected.

The month of October also ushers in the beginning of the seasonal influences on our market, as more people try to time the market and list their homes for sale during the annual winter migration of visitors to Southwest Florida. This causes the supply of unsold homes to increase, creating more price competition between the serious sellers versus those just casting their bait into the water hoping for an overpriced bite. Traditionally, the inventory of unsold supply begins to build in October and reaches its peak sometime between November and February. We could see a somewhat higher supply number this year because of Irma, especially if it takes a bit longer for the number of homes sold to rebound back to normal.

In the overall Cape Coral single-family home market, the monthly supply of unsold homes was up 40 percent to 7 months this September, versus a 5-month supply in both September 2016, and in August of this year. On a quarterly basis, the 3rd quarter had an average monthly supply of 5.67 months, which was 13.4 percent higher than the 5-month average supply in the 3rd quarter 2016, but only 6.38 percent above the 5.33 months of supply from the 2nd quarter of this year. Through the first 9 months of 2017, the overall unsold supply has averaged 6.22 months, which was identical to the same time frame in 2016. This would place the overall single-family home market in the Cape into more of a neutral market.

Gulf access canal homes

The monthly supply of unsold Cape Coral single-family gulf access canal homes was down 11.11 percent to 8 months in September, versus a 9-month supply in September 2016, but up 14.29 percent from a 7-month supply in August. In the 3rd quarter, the supply of unsold gulf access homes declined by 17.79 percent, to an average of 7.67 months, from 9.33 months in the 3rd quarter 2016, and there was no change from the 2nd quarter of this year. The supply of unsold gulf access homes in the Cape has averaged 8.78 months for the first 9 months of 2017, which is a reduction in supply of 15 percent compared to the average of 10.33 months of supply over the first 9 months of 2016. Although this is still firmly in the neutral market range, it is the lowest year-to-date monthly supply of gulf access homes through Sept. 30, since averaging 7.11 months back in 2013.

Sailboat access canal homes

Cape Coral single-family sailboat access canal homes saw the monthly unsold supply rise by 11.11 percent to 10 months this September, versus a 9-month supply in September 2016, and it was 25 percent higher than the 8 months of supply in August of this year. However, the 3rd quarter was down 25 percent to an average supply of 9 months, versus a 12-month average supply in the 3rd quarter of 2016, while edging up 3.8 percent from 8.67 months in the 2nd quarter of this year. Over the first 9 months of 2017, the unsold supply of sailboat access homes has averaged 9.33 months, or 21.53 percent less than the average supply of 11.89 months in the first 9 months of 2016. This leaves the sailboat access canal segment in the higher end of the neutral market range, despite having its lowest average monthly supply through Sept. 30, since averaging 8 months of supply back in 2013.

Freshwater canal homes

The monthly supply of unsold Cape Coral single-family freshwater canal homes jumped 50 percent to 9 months in September, from 6 months in both September 2016, and in August of this year. The supply was also 31.33 percent higher in the 3rd quarter, rising to an average of 7 months from 5.33 months in the 3rd quarter 2016, and up by 23.46 percent from an average of 5.67 months in the 2nd quarter of this year. Through Sept. 30, the unsold supply of freshwater canal homes has averaged 7.22 months in 2017, up 4.79 percent from the average supply of 6.89 months over the first 9 months of 2016. This has moved the freshwater canal segment firmly into a neutral market.

Dry lot homes

After four consecutive months with a supply of unsold dry lot homes holding at 4 months, the supply this September increased 50 percent to 6 months, and it was 50 percent above the 4-month supply from back in September 2016. This was the highest monthly supply total for Cape Coral dry lot homes in any September since 2010, when there was a 9-month supply. The unsold supply also increased in the 3rd quarter, going up by 16.75 percent, to an average of 4.67 months from 4 months in the 3rd quarter 2016, and moving 7.85 percent higher from an average of 4.33 months in the second quarter of this year. Year-to-date, through Sept. 30, the average supply of unsold dry lot homes has been 5 months, or 2.25 percent higher than the average of 4.89 months over the first 9 months of 2016. This is still the only single-family home property segment in the Cape that is in a seller's market, with a supply of unsold homes under 6 months.

As an added thought, we would expect an even tighter rental property market in the coming months, due to the combination of people being displaced by home damage from Hurricane Irma, along with the typical seasonal influences, as our winter visitors begin arriving in town.

(The sales data for this article was obtained from the Florida Realtors Multiple Listing Service Matrix for Lee County, Fla., as of Oct. 15, 2017, and it was compiled by Bob and Geri Quinn. It includes information specifically for Cape Coral single-family homes, not including condominiums, foreclosures or short sales. The data and statistics are believed to be reliable, however, they could be updated and revised periodically, and are subject to change without notice. The Quinns are a husband and wife real estate team with the RE/MAX Realty Team office in Cape Coral. They have lived in Cape Coral for over 38 years. Geri has been a full-time Realtor since 2005, and Bob, who also holds a Certified Financial Planner designation, joined with Geri as a full-time Realtor in 2014. Their real estate practice is mainly focused on Cape Coral residential property and vacant lots.)